1Q-22 RESULTS PRESENTATION

Adriana Navas

Good morning, and welcome to Outcomes Presentation of the First Quarter 2022 Corficolombiana. I remind you that this presentation and the documents will be uploaded on the website in the section "Shareholders and Investors" in "Financial Information".

On the lower left side, you will find the icon of interpretation where you can choose the language at any point. Remember that this teleconference is being recorded and you can hear it once again in the next few days and will be published on our website.

At the end we will have a Q&A session and to get started I will now give the floor to Dr. María Lorena Gutiérrez, President of Corficolombiana.

María Lorena Gutiérrez

Ok good morning to everybody, many thanks for joining us to the presentation of outcomes first quarter 2022. With me as usual in this meeting we have the executive vice president, Doctor Juan Carlos Páez, we have Gustavo Ramírez, vice president of investments, Julián Valenzuela, treasury vice president, we have José Ignacio López, the executive director of Economic Research and we also have Adriana González, Adriana Navas and María José, who always join us during this presentation of outcomes.

I believe that is very important for the outcomes of this first quarter, as you might know, Corficolombiana is in the most important sectors of the economy, that drive the growth of the economy, and therefore we are exposed to ... I like to say a phrase: "if the country does well, Corficolombiana does well, and if Corficolombiana is doing well, the country is doing well". Given our high correlation of the businesses where we invest in the infrastructure, gas and energy sectors, agriculture, hospitality and financial sector, so the economy of the country is very important for our analysis of the financial outcomes. That is why I have requested from José Ignacio, that you all know is our executive director, to provide a presentation especially considering one the variables that is concerning nationally and internationally, which is the inflation, and that affects us positively as well as having some negative effects. So José Ignacio, welcome the floor is yours.

José Ignacio López

Ok, thank you very much María Lorena for the invitation, is a pleasure to greet all of you that are connected to this conference.

I am going to try to be very brief. In this slide I want to show you a summary of our most important macroeconomic overview. First I want to state that the Colombian economy still shows great momentum and a great drive. The figures from the first quarter, where the economy grew 8.5% (or 8.2% if the calculation is made with inflationary adjustment and calendar effect), still shows that the economic recovery is still ongoing. Leading indicators such as demand of energy, transportation, hospitality and tourism sectors, still show that Colombia is in a very important recovery process and this year is going to be strengthened in terms of the sectors that were affected by the pandemic, as the normalization continues.

Going forward we are seeing some adverse effects given the external context, as María Lorena said, global inflation is one of the most concerning variables and since last year, we warned that we were going through a cycle change of the structure, the economic structure as we see inflationary pressures that were taking place globally. As you can see here in our graph, in the upper right-hand graph, how we are now expecting an inflation rate close to 10%. To be precise, our latest forecast is a 9.8% figure, in a range between 9.1% and 10.6%, which shows that for a good part of the year we will continue to experience this inflationary pressure, as an outcome of the inflation in food products that is much stronger in terms of higher prices of commodities still issues with international logistic chains.

You can see there in the bottom left graph, how our inflation forecast has been rising and, as a matter of fact, has been faster than the market average. The consensus of analysts has been following our forecast. Now the average is close to 8.4%, which was our forecast in March and right now the market in May expects to close at 8.4%. And with the latest data, especially with consumer price index and the calculations that we run for the space or the commodities to expect higher prices, we are updating our figure to 9.8%.

As a consequence, we are also seeing the increase of our interest rate in the monetary policy and we are within the range between 8% to 9%. If our forecast of inflation starts taking place we see a greater likelihood towards 9% interest rate than 8% rate, but most likely in the coming months, the Central Bank decision will inform which of these two scenarios will be taking place, and with that state of affairs we will see a second quarter with economic dynamics that are a little bit reduced or less strengthened in the sense that we will still see a high inflation rate and higher interest rates. So this would be the last bullet point that is on the slide, and is basically that for the second half of the year we still see some normalization, but we do not expect growth rates as high as those we saw last year, nor those recorded in the first quarter of this year.

If there are any questions, I will be available during the Q&A section. That would be from our side, Maria Lorena.

María Lorena Gutiérrez

Thank you very much José Ignacio, if you like we can go ahead now and move to our relevant facts of the quarter, we see financial outcomes that are quite good that do show the dynamics of the economy and Corficolombiana. Our assets in consolidated figures increased 13.9% if we compare it with the first quarter of 2021, reaching 46.23 trillion pesos. Our EBITDA has a growth of 24.4%, reaching for the first quarter of this year 1.6 trillion pesos, and our net profit has a growth, compared to the first quarter last year, of 25.8% reaching a figure of 658,608 million pesos.

In terms of relevant facts, I would like to mention a few things, since I hope that many of you have received or have visited our management report, which is published in the web page, that summarizes all the achievements of the corporation and the Corficolombiana Sostenible strategy for the year 2021. During the previous outcome teleconference, we had the opportunity to discuss a little bit about our progress and achievements during the year 2021.

For this first quarter I would like to mention the following relevant facts: the first one is that on March 18, Promigas commissioned the first pilot project for production of green hydrogen and injected it into the natural gas network in Cartagena. This is a very important milestone for Promigas and in general for the entire natural gas sector in Colombia and Latin America. On March 22, we held the Shareholders' Assembly of Promigas were we approved and ordinary and extraordinary dividend of 516 pesos per share.

In infrastructure, I would like to mention good news. In the first quarter we delivered 150 kilometers of the 4G Villavicencio - Yopal highway project. I had the opportunity to go to that delivery, President Duque was there, we were with all the directors of Proindesa, and the partial termination act was also signed for the Functional Unit number 4 of Pacífico 1. As you will see later when Gustavo will detail the investment issues, the progress made in all the 4G concessions is going very well, we have 86% by the end of March, and overall, all the construction concessions have received a cash flow of 1.3 trillion pesos in this first quarter.

Hospitality, as we have mentioned several times, was one of the sectors most affected by the pandemic. Estelar recorded an occupancy rate of 65.5% in this first quarter, returning to the occupancy rate we had before the pandemic. This is very good news, and we are also above the sector, above what is published in terms of occupancy. The sector reached 57%

and Estelar reached 65%. We have also been working on an important brand positioning strategy in Estelar and restaurant renovation.

As I was saying, we made progress in the definition of all ESG criteria, that is, environmental, social and governance criteria in all our investments, and one thing that is very important for us: the Corficolombiana board of directors approved our climate change management strategy. I believe this is one of the challenges we have within Corficolombiana and within all our investments, to identify the risks due to climate change and all the opportunities; a topic that we will be telling you about throughout the year 2022, given the importance that this means for us.

We are working hard with stakeholders and one thing we are very happy about is that we launched the Corficolombiana Sostenible Award, aimed at the 16 thousand suppliers we have in Corficolombiana and in all its companies and subsidiaries, and the idea is to encourage all sustainability initiatives in our suppliers. At this moment we are motivating suppliers to register their initiatives, and we hope, in less than two months, to have good outcomes.

And to finish up, in the next slide I would like to tell you that we have made a great effort to consolidate the information of our ESG criteria, both for Corficolombiana and its subsidiaries and companies. You can have access to all the information on all our carbon footprint emission issues, the different environmental and social indicators, all our social investments and all our corporate governance indicators. You can find this on our website, in the sustainability and ESG impacts section. I really like to encourage you to enter and visit it, because we have made a great effort to consolidate all these ESG figures in all our companies and investments, as well as Corficolombiana.

Now I would like to give the floor to Juan Carlos Páez, who is going to quickly show you the outcomes of our first quarter, our financial outcomes.

Juan Carlos Páez

María Lorena, thank you very much. Greetings to all the participants. As you can see in the presentation we changed the numerical tables for this ladder, which shows in a graphic way the evolution of the results of the corporation's financial statement, as consolidated financial statements. As María Lorena said, the total result grows significantly from 658,623 million pesos in the previous quarter to 876,700 million pesos in this first quarter of the year 2022, of which 658,608 correspond to controlling profit against the 523,400 million pesos that we showed a year ago.

In the first part of the table that we now return to, we show the growth of the gross margin of the

real sector compared to last year. Let us remember that all these figures are in the written report of financial results, it is a document, you know it well with all the details by sector, and there you can see the particularities of each one of the sectors in which the corporation has investments.

Especially here, what we want to show is that this growth of the gross margin of the real sector which is equivalent to 20% or 246,176 million pesos in the first quarter of 2021 and first quarter of 2022, show additional contributions from the infrastructure sector in 56 billion pesos, adjusting 436 thousand in the quarter. Energy and gas contributes P133.867 billion more than what it did a year ago, reaching P185.914 in the quarter. Hospitality also has a very good performance: it contributes 43,134 million pesos more, going from negative, as we showed you a year ago, to a positive figure of 5,169. Agribusiness also continues to show an excellent performance, contributing 11,479 million pesos more than it did a year ago.

And not only is this consolidated result good because of the gross margin of the real sector, but you can see that in all the areas of the financial statement there are additional contributions compared to what we showed a year ago. The financial business, seen as such, contributes 31 billion pesos more. The equity method of the subsidiaries, of the subordinated companies, contributes almost 34 billion pesos more, this obviously also helped by a greater distribution of dividends. The financial expense contributes a positive figure, in this case of 33 billion pesos and obviously we have the effect of a higher tax of 122,915 million pesos, for a total of 388 billion pesos caused in this first quarter of 2022, to reach the figure we mentioned at the beginning of my presentation.

The following graph is also a new graph that intends to share with you the diversification in this consolidated funding. This structure of the financial statements, as you know, is simple, it is totally coherent with the definition of the business model of each of the sectors, and you can see that while assets grew by 14%, equity grew by 10% and liabilities grew by 16%. Regarding the aggregate between credits, bonds and public deposits, we grew only 13%, and it is interesting to see how in the energy and gas sector we have a very stable evolution of this leverage: it only grew 5.7%. Infrastructure grew by 20%, clearly associated with the capital needs that this sector requires in the construction segment. We see the Holding Company, which is basically the financial business managed directly by the corporation, growing 44% year after year, but this is associated with the needs and liquidity strategies that the treasury manages. In the other sectors, there is a 17% decrease.

In the lower part we see how this leverage of the corporation is diversified. 29% corresponds to deposits with the public, 42% to credit operations and almost 30% corresponds to bond

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

CORFICOLOMBIANA - Corporación Financiera Colombiana SA published this content on 30 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 August 2022 21:10:44 UTC.